The Global Trends Improving Cross-Jurisdictional Activism

Independent initiatives on part by activists will help shareholders, boards and management improve communicative interactions across the global marketplacePexels

Across the global marketplace, institutional investors and shareholders are trying to capitalize on new trends to improve cross-jurisdictional activism. Amy Freedman, Chief Executive Officer of Kingsdale Advisors, has insight on which global trends will benefit shareholders and investors alike in the global marketplace.

“Independent thinking on the part of the world’s largest investors coupled with the recognition and willingness to use their votes to send a message and effect change [in the global marketplace],” writes Freedman. “More institutional investors are enhancing their focus and resources to make increasingly informed voting decisions.”

At Kingsdale Advisors, Freedman is responsible for providing service and strategic advice to public company boards and management in an effort to enhance the value for their shareholders.

In order to do that, shareholders and institutional investors must go above and beyond their initial contacts with proxy advisory services.

“In our discussion with significant institutional investors, they are all very adamant that while they may subscribe to the proxy advisory services of Institutional Shareholder Services and Glass Lewis, this is only one input for a voting decision,” writes Freedman.

She continues, “The willingness of investors to have a more enhanced discussion with management teams and dissidents and perform more detailed analysis means that the detailed work activists do is really being considered.”

As each discussion becomes more enhanced between management teams and dissidents, the quality of responses amongst both sides increases as well.

“This also raises the bar for issuers by ensuring management and boards truly form a defensible argument rather than simply relying on a tendency for shareholders to support the incumbents,” Freedman writes.

This particular trend in active communication is being helped by the fact that some funds are taking an active approach to voting, rather than the traditional “passive” approach associated with their investments.

“Just because a fund is passive when it comes to investing doesn’t mean they are passive when it comes to governance,” writes Freedman. “If you are targeting a larger cap index owned company this element plays a significant role in the potential outcome.”

Christopher P. Skroupa is the founder and CEO of Skytop Strategies, a global organizer of conferences.

I work with institutional investors and fund managers in the U.S., Europe and Asia on issues involving asset allocation, risk management, corporate governance, active investing and socially responsible investments. I focus on the intersection of government, Wall Street and m...